William Ellis v. Salt River Project

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
WILLIAM ELLIS; ROBERT DILL; Nos. 20-15301
EDWARD RUPPRECHT; ROBERT 20-15476
GUSTAVIS, individually and on
behalf of all others similarly situated, D.C. No.
Plaintiffs-Appellants/ 2:19-cv-01228-
Cross-Appellees, SMB
v.
OPINION
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER
DISTRICT,
Defendant-Appellee/Cross-
Appellant.
Appeal from the United States District Court
for the District of Arizona
Susan M. Brnovich, District Judge, Presiding
Argued and Submitted February 2, 2021
Phoenix, Arizona
Filed January 31, 2022
2 ELLIS V. SALT RIVER PROJECT
Before: William A. Fletcher, Eric D. Miller, and
Danielle J. Forrest, * Circuit Judges.
Opinion by Judge Miller
SUMMARY **
Antitrust
The panel affirmed in part and reversed in part the
district court’s dismissal of an action alleging that a price
plan adopted by Salt River Project Agricultural
Improvement and Power District (“SRP”), a power and
water utility, unlawfully discriminated against customers
with solar-energy systems and was designed to stifle
competition in the electricity market.
Affirming in part, the panel held applicable in federal
court Arizona’s notice-of-claim statute, which provides that
persons who have claims against a public entity, such as
SRP, must file with the entity a claim containing a specific
amount for which the claim can be settled. The panel held
that the Arizona statute did not conflict with Federal Rule of
Civil Procedure 23 by imposing an extra barrier to class
certification, and it was not a state procedural rule
inapplicable in federal court under the Erie doctrine. The
panel held that plaintiffs failed to comply with the notice-of-
claim statute, and it therefore barred their state-law claims.
*
Formerly known as Danielle J. Hunsaker.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
ELLIS V. SALT RIVER PROJECT 3
Reversing and remanding in part, the panel held that the
district court erred in dismissing plaintiffs’ equal protection
claim as barred by Arizona’s two-year statute of limitations
for personal-injury claims. The panel held that, under
federal law, the claim did not accrue when SRP approved the
price plan, but rather when plaintiffs received a bill under the
new rate structure. The panel held that because three
plaintiffs sued within two years of first being charged under
the price plan, their claims were timely as to all charges
incurred. A fourth plaintiff did not sue within two years of
becoming subject to the price plan, but he was charged under
it within the limitations period. His claims, therefore, were
timely only as to charges incurred within two years of suing.
The panel held that what plaintiffs alleged was not a
continuing violation, but rather a series of repeated
violations, each of which gave rise to a new cause of action
and thereby began a new statute of limitations period as to
that particular event.
Addressing plaintiffs’ claims for monopolization and
attempted monopolization under the Sherman Act, the panel
affirmed the district court’s rulings that the claims were not
barred by the filed-rate doctrine and state-action immunity
and that the Local Government Antitrust Act shielded SRP
from federal antitrust damages. The panel reversed the
district court’s holding that plaintiffs failed sufficiently to
allege antitrust injury.
The panel held that antitrust injury requires (1) unlawful
conduct, (2) causing an injury to the plaintiff, (3) that flows
from that which makes the conduct unlawful, and (4) that is
of the type the antitrust laws were intended to prevent. The
panel held that the district court erred in concluding that
plaintiffs failed to adequately allege antitrust injury based on
the court’s finding that the price plan actually encouraged
4 ELLIS V. SALT RIVER PROJECT
competition in alternative energy investment. The panel
rejected SRP’s arguments that plaintiffs’ allegations were
insufficient because they paid the higher rate before SRP
could succeed in fully displacing competition or because
they could not claim to have been injured by the
exclusionary conduct because they had attempted to use the
market alternatives that they claimed SRP tried to make
uneconomical.
The panel held that the filed-rate doctrine, prohibiting
individuals from asserting civil antitrust challenges to an
entity’s agency-approved rates, did not apply because SRP
did not file its rates with anyone other than itself.
The panel held that SRP was not entitled to state-action
immunity because the State of Arizona had not articulated a
policy to displace competition, but rather had clearly
expressed a policy preference for competition in electricity
generation and supply.
The panel held that the Local Government Antitrust Act
shielded SRP from antitrust damages because SRP is a
special functioning governmental unit established by
Arizona law, but the Act did not bar declaratory or injunctive
relief.
ELLIS V. SALT RIVER PROJECT 5
COUNSEL
Hart L. Robinovitch (argued), Zimmerman Reed LLP,
Scottsdale, Arizona; David M. Cialkowski and Alia M.
Abdi, Zimmerman Reed LLP, Minneapolis, Minnesota;
Daniel E. Gustafson, Daniel C. Hedlund and Daniel J.
Nordin, Gustafson Gluek PLLC, Minneapolis, Minnesota;
for Plaintiffs-Appellants/Cross-Appellees.
Daniel S. Volchok (argued), Christopher E. Babbitt, and
David Gringer, Wilmer Cutler Pickering Hale and Dorr LLP,
Washington, D.C.; Elizabeth Bewley, Wilmer Cutler
Pickering Hale and Dorr LLP, Boston, Massachusetts; Eric
Dell Gere, Jennings Strouss & Salmon PLC, Phoenix,
Arizona; for Defendants-Appellees/Cross-Appellants.
Matthew C. Mandelberg (argued), Daniel E. Haar, and
Steven J. Mintz, Attorneys; Andrew J. Robinson, Counsel to
the Assistant Attorney General; Michael F. Murray, Deputy
Assistant Attorney General; Makan Delrahim, Assistant
Attorney General; United States Department of Justice,
Antitrust Division, Washington, D.C.; for Amicus Curiae
United States of America.
Howard M. Crystal and Anchun Jean Su, Center for
Biological Diversity, Washington, D.C., for Amici Curiae
Center for Biological Diversity, Food and Water Watch,
Friends of the Earth Inc., Institute for Local Self-Reliance,
and N.C. Warn Inc.
6 ELLIS V. SALT RIVER PROJECT
OPINION
MILLER, Circuit Judge:
Salt River Project Agricultural Improvement and Power
District (SRP) is a power and water utility that services most
of the Phoenix metropolitan area. In 2015, SRP increased
prices for customers with solar-energy systems. Plaintiffs
William Ellis, Robert Dill, Edward Rupprecht, and Robert
Gustavis (collectively, “Ellis”) sued SRP under federal and
state law, alleging that the new price plan unlawfully
discriminates against customers with solar-energy systems
and was designed to stifle competition in the electricity
market. The district court dismissed the complaint in its
entirety. Ellis appeals the dismissal of his claims, and SRP
cross-appeals the district court’s rejection of certain of its
affirmative defenses. We affirm the district court’s dismissal
of Ellis’s state-law claims but reverse the dismissal of the
federal claims and remand for further proceedings.
I
Because the district court resolved this case on a motion
to dismiss, we assume the truth of the facts as set out in the
complaint. Wojciechowski v. Kohlberg Ventures, LLC,
923 F.3d 685, 688 n.2 (9th Cir. 2019).
SRP is a political subdivision of the State of Arizona.
Ariz. Rev. Stat. Ann. § 48-2302. It controls the electrical
grid and has authority to set prices for the sale and
distribution of electricity to the approximately one million
retail customers in its service territory. It supplies more than
95 percent of the electricity used by those customers.
Some of SRP’s customers have chosen to install solar-
energy systems, such as rooftop solar panels, thereby
ELLIS V. SALT RIVER PROJECT 7
reducing the amount of electricity they need to purchase
from SRP. But solar energy is not always available, and
customers with solar installations must still rely on SRP
when their solar-energy systems do not produce electricity
or produce less electricity than they need.
In the past, SRP encouraged the use of solar-energy
systems. For example, its net metering program gave
customers credit on their bill for generating excess
electricity, which was transmitted through the grid and
purchased at retail rates by other customers. SRP also
attempted to enter the solar-energy market itself, but when
that effort faltered, it eliminated incentives to install solar-
energy systems. Even so, SRP’s service territory has one of
the highest rates of solar installation in the nation.
In 2014, SRP announced a new pricing scheme that
included various “Standard Electric Price Plans.” One of
those plans, the E-27 price plan, established separate rates
for customers who generate their own electricity through
solar-energy systems. The E-27 plan applies only to
customers who installed solar panels after December 8,
2014; those who had already installed solar panels were
grandfathered into the previous pricing scheme. Under the
E-27 plan, solar customers can be charged up to 65 percent
more for SRP electricity than under prior plans for solar
customers.
In February 2015, the SRP board of directors approved
the new pricing scheme. At the same time, it adopted a rate
increase for its non-solar customers of only about
3.9 percent. After adopting the new pricing scheme, SRP
undertook a $1.7 million advertising campaign to promote
its increased rates for solar customers. Not surprisingly,
applications for solar-energy systems in SRP territory
decreased by between 50 and 96 percent.
8 ELLIS V. SALT RIVER PROJECT
Ellis is an SRP customer who is subject to the new E-27
price plan. He sued SRP in federal court on behalf of a
putative class of similarly situated customers. In his first
amended complaint (the operative pleading here), he
asserted claims under the Sherman Act, 15 U.S.C. § 2;
various Arizona consumer protection, antitrust, and price
discrimination laws; and the equal protection clauses of the
United States and Arizona constitutions. Ellis alleged that
the E-27 price plan “discriminates against customers that use
solar energy systems and disincentivizes further purchases
and use of solar energy systems” by eliminating “the
economic value in investing in solar energy systems to self-
generate electricity,” leading customers “to obtain their
electrical power needs exclusively from SRP.” According to
Ellis, “[t]he E-27 price plan makes it impossible for solar
customers to obtain any viable return on a solar energy
system investment, thereby eliminating any competition
from solar energy.”
The district court dismissed the complaint in its entirety.
First, the district court held that the state-law claims were
barred because Ellis did not comply with Arizona’s notice-
of-claim statute by filing an appropriate claim with SRP
before bringing suit. See Ariz. Rev. Stat. Ann. § 12-821.01.
Second, it dismissed the federal equal protection claim as
untimely. Third, although it held inapplicable the filed-rate
and state-action-immunity doctrines, it dismissed the federal
antitrust claims for failure to allege antitrust injury. It also
concluded that the Local Government Antitrust Act
(LGAA), 15 U.S.C. §§ 34–36, shields SRP from federal
antitrust damages.
Ellis appeals. Because the district court granted Ellis
leave to amend his federal antitrust claims, SRP cross-
appeals the district court’s rejection of its alternative grounds
ELLIS V. SALT RIVER PROJECT 9
for dismissal, which, if accepted, would have resulted in a
dismissal with prejudice. But Ellis did not file an amended
complaint within the time allotted by the district court, and
the district court subsequently entered an order terminating
the case. Because that order did not specify otherwise, it
“operates as an adjudication upon the merits,” or in other
words as a dismissal with prejudice. Stewart v. U.S.
Bancorp, 297 F.3d 953, 956 (9th Cir. 2002) (quoting Fed. R.
Civ. P. 41(b)). Thus, SRP has already obtained the judgment
it now seeks through its cross-appeal. An appellee must
cross-appeal to obtain “relief more extensive than [that]
received from the district court,” Dodd v. Hood River
County, 59 F.3d 852, 864 (9th Cir. 1995), but it should not
cross-appeal if all it wishes to do is present alternative
grounds for affirming the judgment, Spencer v. Peters,
857 F.3d 789, 797 n.3 (9th Cir. 2017); see, e.g., El Paso Nat.
Gas Co. v. Neztsosie, 526 U.S. 473, 479 (1999). SRP’s cross-
appeal is therefore unnecessary; the arguments SRP
advances in the cross-appeal should simply have been
asserted as alternative grounds for affirmance in SRP’s
appellee’s brief. But we may affirm on any ground supported
by the record, so we will proceed to consider the issues
raised in both appeals. See Spencer, 857 F.3d at 797 n.3.
II
We first consider whether Arizona’s notice-of-claim
statute applies in federal court and, if so, whether Ellis
satisfied it. We hold that the statute applies and that Ellis did
not comply with its terms, so it bars his state-law claims.
Under Arizona law, “[p]ersons who have claims against
a public entity” such as SRP must file a claim with the entity
“within [180] days after the cause of action accrues . . .
contain[ing] a specific amount for which the claim can be
settled.” Ariz. Rev. Stat. Ann. § 12-821.01(A). A claim that
10 ELLIS V. SALT RIVER PROJECT
is not so filed “is barred and no action may be maintained
thereon.” Id.; see Deer Valley Unified Sch. Dist. No. 97 v.
Houser, 152 P.3d 490, 492 (Ariz. 2007).
The statute poses a dilemma for those seeking to bring a
class action: “Persons filing a claim with a public entity do
not yet represent a class,” so they “have authority to settle
only their individual claims.” City of Phoenix v. Fields,
201 P.3d 529, 533 (Ariz. 2009). That means that those
seeking to assert a class claim are unable to “set forth a
‘specific amount’ for which the claim of the entire class ‘can
be settled.’” Id. (quoting Ariz. Rev. Stat. Ann. § 12-
821.01(A)). To resolve that dilemma, the Arizona Supreme
Court has interpreted section 12-821.01(A) to allow a
would-be class representative to “include in his notice of
claim a ‘specific amount’ for which his individual claim can
be settled,” together with “a statement that, if litigation
ensues, the representative intends to seek certification of a
plaintiff class.” Id. at 534. “If a class is later certified, the
notice of claim will serve as a representative notice for other
class members.” Id.
Ellis argues that section 12-821.01(A) allows public-
entity defendants to “pick off” class representatives by
forcing settlement of their individual claims before a class
can be certified, thereby preventing them from representing
a class. This, he says, conflicts with Federal Rule of Civil
Procedure 23 by imposing an extra barrier to class
certification. Alternatively, Ellis contends that section 12-
821.01(A) is a state procedural rule that does not apply in
federal court under Erie Railroad Co. v. Tompkins, 304 U.S.
64 (1938).
ELLIS V. SALT RIVER PROJECT 11
A
To determine whether Rule 23 displaces Arizona’s
notice-of-claim statute, we “must first determine whether
Rule 23 answers the question in dispute.” Shady Grove
Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393,
398 (2010). We ask “whether, when fairly construed, the
scope of Federal Rule [23] is ‘sufficiently broad’ to cause a
‘direct collision’ with the state law or, implicitly, to ‘control
the issue’ before the court, thereby leaving no room for the
operation of that law.” Burlington N. R.R. Co. v. Woods,
480 U.S. 1, 4–5 (1987) (quoting Walker v. Armco Steel
Corp., 446 U.S. 740, 749–50 & n.9 (1980)). If so, then the
federal rule controls “unless it exceeds statutory
authorization or Congress’s rulemaking power.” Shady
Grove, 559 U.S. at 398.
In Shady Grove, the Supreme Court considered a New
York statute providing that “an action to recover a penalty
. . . imposed by statute may not be maintained as a class
action.” 559 U.S. at 396 n.1 (quoting N.Y. C.P.L.R. 901(b)).
The Court emphasized that both Rule 23 and the state law
addressed the same question: “whether a class action may
proceed for a given suit.” Id. at 401. Because Rule 23
“creates a categorical rule entitling a plaintiff whose suit
meets the specified criteria to pursue his claim as a class
action,” and the state law “attempt[ed] to answer the same
question” by dictating that the same suit “may not be
maintained as a class action,” the provisions conflicted. Id.at 398–99 (emphasis omitted) (quoting N.Y. C.P.L.R.
901(b)).
But unlike the statute considered in Shady Grove, which
specifically foreclosed class treatment of otherwise valid
claims, section 12-821.01(A) does not so much as mention
class actions. It merely requires that a potential class
12 ELLIS V. SALT RIVER PROJECT
representative, like any other plaintiff, file a notice of claim
before filing suit; noncompliance bars individual and class
claims alike. If section 12-821.01(A) prevents a claim from
ripening into a viable class action, it is not because Arizona
has “impose[d] additional requirements” beyond what Rule
23 demands. Shady Grove, 559 U.S. at 401. It is because the
plaintiff has failed to satisfy a prerequisite to asserting any
claim against a public entity under Arizona law.
Ellis attempts to identify a direct conflict between the
state law and the federal rule by emphasizing that federal
courts interpret Rule 23 to allow “a would-be class
representative with a live claim of her own . . . a fair
opportunity to show that certification is warranted.”
Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 165 (2016).
We have held that “when a defendant consents to judgment
affording complete relief on a named plaintiff’s individual
claims before certification, but fails to offer complete relief
on the plaintiff’s class claims, a court should not enter
judgment on the individual claims, over the plaintiff’s
objection, before the plaintiff has had a fair opportunity to
move for class certification.” Chen v. Allstate Ins. Co.,
819 F.3d 1136, 1147 (9th Cir. 2016). Thus, forcing the
settlement of the class representative’s claims prevents the
representative from “fairly and adequately protect[ing] the
interests of the class” and obtaining a class-wide settlement.
Fed. R. Civ. P. 23(a)(4), 23(e).
But neither the class representative’s duty to represent
the class’s interests nor the representative’s interest in
certifying a class exist at the time the pre-suit notice of claim
is filed. Fields, 201 P.3d at 533. And as soon as the public
entity rejects the settlement offer, the claim may proceed
unencumbered. See id. Because a claim under Arizona law
asserted against a public entity does not become “live” until
ELLIS V. SALT RIVER PROJECT 13
the notice of claim is filed, Campbell-Ewald, 577 U.S.
at 165, section 12-821.01(A) does not impinge on a class
representative’s duties and rights under Rule 23. The
provisions “can exist side by side . . . , each controlling its
own intended sphere of coverage without conflict.” Walker,
446 U.S. at 752.
B
Because there is no conflict between the state law and
the federal rule, we proceed to determine whether the state
law applies in federal court under the Erie doctrine. See
Shady Grove, 559 U.S. at 398.
“[F]ederal courts sitting in diversity apply state
substantive law and federal procedural law.” Gasperini v.
Center for Humanities, Inc., 518 U.S. 415, 427 (1996).
Distinguishing between substantive legal rules and the
procedures for enforcing those rules is not always easy. See
Hanna v. Plumer, 380 U.S. 460, 471 (1965). The Supreme
Court has held that for purposes of Erie, the line between
substance and procedure must be drawn so as to ensure that
“the outcome of the litigation in the federal court should be
substantially the same, so far as legal rules determine the
outcome of a litigation, as it would be if tried in a State
court.” Felder v. Casey, 487 U.S. 131, 151 (1988) (quoting
Guaranty Tr. Co. v. York, 326 U.S. 99, 109 (1945)). This
“‘outcome-determination’ test must not be applied
mechanically” but instead “must be guided by ‘the twin aims
of the Erie rule: discouragement of forum-shopping and
avoidance of inequitable administration of the laws.’”
Gasperini, 518 U.S. at 428 (quoting Hanna, 380 U.S.
at 468).
The Supreme Court has demonstrated how this test
applies to a statute like section 12-821.01(A). In Felder, the
14 ELLIS V. SALT RIVER PROJECT
Court held that a similar notice-of-claim statute under
Wisconsin law does not apply to federal civil-rights claims.
487 U.S. at 134. In reaching that conclusion, the Court
explained that a “state notice-of-claim statute is more than a
mere rule of procedure: . . . [It] is a substantive condition on
the right to sue governmental officials and entities, and the
federal courts have therefore correctly recognized that [such
a] notice statute governs the adjudication of state-law claims
in diversity actions.” Id. at 152. So although such a statute
does not apply to claims arising under federal law, “federal
courts entertaining state-law claims against [state]
municipalities are obligated to apply the notice-of-claim
provision.” Id. at 151 (emphasis added); see also Woods v.
Interstate Realty Co., 337 U.S. 535, 537 (1949) (“[T]he
policy of [Erie] preclude[s] maintenance in . . . federal court
. . . of suits to which the State ha[s] closed its courts.”).
Like the statute at issue in Felder, section 12-821.01(A)
advances the substantive state interests of “allow[ing] the
public entity to investigate and assess liability,” encouraging
“settlement prior to litigation,” and “assist[ing] the public
entity in financial planning and budgeting.” Deer Valley,
152 P.3d at 492 (quoting Falcon ex rel. Sandoval v.
Maricopa County, 144 P.3d 1254, 1256 (Ariz. 2006)). It also
reflects the State’s sovereign interest in placing conditions
on claims asserted against state entities. See Banner Univ.
Med. Ctr. Tucson Campus, LLC v. Gordon ex. rel. County of
Pima, 467 P.3d 257, 262 (Ariz. Ct. App. 2020) (“[T]he
notice-of-claim statute is, fundamentally, a codification of
sovereign immunity.”). Declining to apply section 12-
821.01(A) would lead plaintiffs to shop for a federal forum
free from Arizona’s notice-of-claim requirement, producing
disparate outcomes between federal and state litigants. See
Gasperini, 518 U.S. at 430–31. We conclude that the statute
applies in federal court. See Felder, 487 U.S. at 151–52.
ELLIS V. SALT RIVER PROJECT 15
C
Having determined that section 12-821.01(A) applies,
we consider whether Ellis satisfied it. Before filing suit, Ellis
submitted a notice stating that his claims could be settled
under the following conditions: the court’s awarding of
injunctive and declaratory relief to the class; “monetary
relief equal to no less than $1.64 per day . . . per individual”
for each day the individual “was charged the discriminatory
rates, . . . through and inclusive of the date the injunctive and
declaratory relief . . . are fully and finally implemented”; and
“attorneys’ fees and costs.”
That notice was deficient because it did not state “a
specific amount for which the claim[s] can be settled.” Ariz.
Rev. Stat. Ann. § 12-821.01(A). The statute “instructs
claimants to include a particular and certain amount of
money that, if agreed to by the government entity, will settle
the claim.” Deer Valley, 152 P.3d at 493. Ellis’s claim did
not do that. Instead, it conditioned settlement on two
demands that are impermissible under section 12-821.01(A).
First, it stated that Ellis would not settle even his individual
monetary claim without a grant of injunctive relief to the
entire class. It therefore did not specify how Ellis’s
“individual claim [could] be settled.” Fields, 201 P.3d at 534(emphasis added). Second, the requested monetary relief
was not “a particular and certain amount of money” but
instead an amount “no less than” the amount to be calculated
using a formula that depended on the not-yet-specified
number of class members and the not-yet-determined date
on which injunctive and declaratory relief might be awarded.
Deer Valley, 152 P.3d at 493; see id. at 494 (plaintiff may
not demand an “estimated value”).
Ellis argues that section 12-821.01(A) does not apply to
his claims for declaratory and injunctive relief. He did not
16 ELLIS V. SALT RIVER PROJECT
raise that argument below, so we decline to consider it now.
See Doe v. CVS Pharmacy, Inc., 982 F.3d 1204, 1213 (9th
Cir. 2020) (arguments raised “for the first time on appeal”
are forfeited).
III
We turn next to the federal equal protection claim.
Because Ellis brought that claim under 42 U.S.C. § 1983, it
is subject to the limitations period for personal-injury claims
under state law, which in Arizona is two years. Wilson v.
Garcia, 471 U.S. 261, 276 (1985); Ariz. Rev. Stat. Ann.
§ 12-542. The period starts to run when the claim accrues.
Flynt v. Shimazu, 940 F.3d 457, 462 (9th Cir. 2019). Federal
law governs the accrual of a section 1983 claim, and a cause
of action accrues “when the plaintiff knows or has reason to
know of the actual injury” that is the basis for the action.
Lukovsky v. City & Cnty. of S.F., 535 F.3d 1044, 1051 (9th
Cir. 2008); accord Belanus v. Clark, 796 F.3d 1021, 1025
(9th Cir. 2015).
The district court held that Ellis’s claim was untimely
because the claim accrued—and thus the statute of
limitations began to run—when SRP approved the E-27 plan
in February 2015. But at that point, the plan had not yet
caused Ellis any injury, so he could not have “know[n] or
ha[d] reason to know of the actual injury.” Lukovsky,
535 F.3d at 1051. The injury occurred only when Ellis
received a bill under the new rate structure. Indeed, Ellis
suffered a new injury with each monthly bill, which means
that a new claim arose each month. See Flynt, 940 F.3d
at 462.
In concluding that all of the claims were untimely, the
district court relied on RK Ventures, Inc. v. City of Seattle,
307 F.3d 1045, 1058 (9th Cir. 2002), in which we held that
ELLIS V. SALT RIVER PROJECT 17
the statute of limitations runs from the “‘operative decision’”
and not from its “inevitable consequences that are not
separately actionable.” Id. (quoting Chardon v. Fernandez,
454 U.S. 6, 8 (1981)). That case involved a challenge to an
abatement proceeding brought by a city; although the
commencement of the action was outside the statute of
limitations, the plaintiff argued that later events in the
proceeding, such as holding a hearing, had restarted the
limitations period. Id. We rejected that argument because
those later events, although injurious, were not themselves
actionable. Id. For example, holding a hearing in a
proceeding that had already begun “was not a separately
unconstitutional act.” Id. The cases on which SRP relies are
similar: They involved challenges not to new wrongful acts,
but rather to the inevitable—and not independently
unlawful—consequences of the operative, time-barred
decision. See Knox v. Davis, 260 F.3d 1009, 1013 (9th Cir.
2001) (holding that subsequent denials of client visits based
on the permanent suspension of attorney’s visitation rights
did not restart the limitations period); Pace Indus., Inc. v.
Three Phoenix Co., 813 F.2d 234, 239 (9th Cir. 1987)
(holding that each phase of a single enforcement action does
not give rise to new, actionable overt acts).
Our analysis of the limitations issue here parallels that of
courts in Title VII cases. See Cherosky v. Henderson,
330 F.3d 1243, 1246 n.3 (9th Cir. 2003) (explaining that
precedent governing the Title VII statute of limitations
“applies with equal force . . . to actions arising under”
section 1983); RK Ventures, 307 F.3d at 1059. In Bazemore
v. Friday, 478 U.S. 385 (1986), for example, the Supreme
Court held that each paycheck issued under a racially
discriminatory pay structure is an independent violation of
Title VII that supports an independent claim and starts the
running of the limitations period for that claim. Id. at 395–
18 ELLIS V. SALT RIVER PROJECT
96 (Brennan, J., joined by all other Members of the Court,
concurring in part). As the Court later explained, an
employer “can surely be regarded as intending to
discriminate on the basis of race as long as the [facially
discriminatory] structure is used,” so “the employer
engage[d] in intentional discrimination whenever it issue[d]
a check to one of these disfavored employees.” Ledbetter v.
Goodyear Tire & Rubber Co., Inc., 550 U.S. 618, 634
(2007), superseded by statute, Lilly Ledbetter Fair Pay Act
of 2009, Pub. L. No. 111-2, 123 Stat. 5.
Applying that principle to the facts of this case requires
us to distinguish among the individual named plaintiffs,
whose circumstances vary somewhat. Ellis’s claim is that the
difference in rates between solar customers and other
customers violates the Equal Protection Clause; on that
theory, it is charging the rates—not merely announcing
them—that constitutes the constitutional violation. Thus, the
dates on which customers were charged rates under the plan
are significant in determining the timeliness of their claims.
Ellis, Dill, and Gustavis all sued within two years of first
being charged under the E-27 price plan, so their claims are
timely as to all charges incurred. Rupprecht, however, did
not sue within two years of becoming subject to the E-27
plan, but he was charged under it within the limitations
period. His claims, therefore, are timely only as to charges
incurred within two years of suing.
Ellis suggests that all of the named plaintiffs’ claims are
timely because SRP’s conduct constituted a “continuing
violation.” As we have explained in prior cases, however,
that term can be somewhat misleading. What Ellis alleges is
not “one on-going violation,” but instead “a series of
repeated violations,” each of which “gives rise to a new
cause of action” and thereby “begins a new statute of
ELLIS V. SALT RIVER PROJECT 19
limitations period as to that particular event.” Flynt, 940 F.3d
at 462 n.3 (quoting Knight v. Columbus, 19 F.3d 579, 582
(11th Cir. 1994)). In the past, we recognized a broader
“continuing violations doctrine” under which a plaintiff
alleging a series of related acts, some of which occurred
within the limitations period, could recover for all of the acts,
including those that occurred before the limitations period.
See Cherosky, 330 F.3d at 1246. But the Supreme Court
largely eliminated that doctrine when it held in National
Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002),
that “discrete discriminatory acts are not actionable if time
barred, even when they are related to acts alleged in timely
filed charges.” Id. at 113; see Bird v. Department of Hum.
Servs., 935 F.3d 738, 746–48 (9th Cir. 2019). Where, as
here, a plaintiff alleges “claims based on discrete acts,” the
claims “are only timely where such acts occurred within the
limitations period.” Cherosky, 330 F.3d at 1246.
We emphasize that it remains disputed whether the bills
issued to Ellis are in fact unlawful. SRP urges us to affirm
the dismissal of the equal protection claim on the alternative
ground that the distinctions drawn by the E-27 plan are
supported by a rational basis and are therefore permissible.
But the district court did not address that theory, and we
decline to do so in the first instance. Instead, we leave it to
the district court to consider on remand.
IV
That leaves the federal antitrust claims. Ellis asserts
claims for monopolization and attempted monopolization in
violation of the Sherman Act, 15 U.S.C. § 2. The district
court dismissed those claims for failure to allege antitrust
injury. Along the way, the district court also concluded that
the filed-rate doctrine and state-action immunity do not bar
Ellis’s claims and that the Local Government Antitrust Act
20 ELLIS V. SALT RIVER PROJECT
shields SRP from federal antitrust damages. We reverse the
district court’s holding on antitrust injury and affirm its other
rulings.
A
A private antitrust plaintiff “must prove the existence of
‘antitrust injury, which is to say injury of the type the
antitrust laws were intended to prevent and that flows from
that which makes defendants’ acts unlawful.’” Atlantic
Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334
(1990) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat,
Inc., 429 U.S. 477, 489 (1977)). We have identified “four
requirements for antitrust injury: (1) unlawful conduct, (2)
causing an injury to the plaintiff, (3) that flows from that
which makes the conduct unlawful, and (4) that is of the type
the antitrust laws were intended to prevent.” American Ad
Mgmt., Inc. v. General Tel. Co. of Cal., 190 F.3d 1051, 1055
(9th Cir. 1999).
The district court believed that Ellis did not adequately
allege antitrust injury. In its view, the E-27 price plan
actually “encourages competition in alternative energy
investment by allowing for new market entrants with its
higher prices.” Emphasizing that “solar energy systems are
still uneconomical,” the district court concluded that SRP’s
“alleged anticompetitive conduct . . . did not cause [Ellis’s]
injury because [he] would have been harmed anyway from
using an uneconomical product.”
The district court’s findings that SRP’s price plan
promotes competition and that Ellis cannot establish
causation are inconsistent with its uncontested conclusion
that Ellis adequately alleged exclusionary conduct designed
“to (1) deter the competitive threat of solar energy systems;
(2) penalize solar energy investments to fortify [SRP’s]
ELLIS V. SALT RIVER PROJECT 21
monopoly; (3) and force consumers to exclusively purchase
electricity from [SRP] by making solar energy system
installation uneconomical.” By the district court’s own logic,
solar-energy systems are uneconomical, at least in part,
because of SRP’s exclusionary conduct.
On appeal, SRP does not attempt to defend the district
court’s reasoning. Instead, it argues that Ellis has not
adequately alleged antitrust injury because he paid the higher
rate before SRP could succeed in fully displacing
competition. SRP also contends that Ellis cannot claim to
have been injured by exclusionary conduct because he has
attempted to use the market alternative that he claims SRP
tried to make uneconomical.
Both of those theories are flawed because “[c]oercive
activity that prevents its victims from making free choices
between market alternatives” gives rise to antitrust injury.
Glen Holly Entm’t, Inc. v. Tektronix, Inc., 352 F.3d 367, 374
(9th Cir. 2003) (quoting Amarel v. Connell, 102 F.3d 1494,
1509 (9th Cir. 1996)). To adequately plead antitrust injury,
a plaintiff need not allege that the exclusionary conduct has
succeeded in displacing all competition. See id. at 376; cf.
Brunswick, 429 U.S. at 489 n.14 (“[C]ompetitors may be
able to prove antitrust injury before they actually are driven
from the market and competition is thereby lessened.”).
Rather, the plaintiff need only “show that diminished
consumer choices and increased prices are the result of a less
competitive market due to either artificial restraints or
predatory and exclusionary conduct.” FTC v. Qualcomm,
Inc., 969 F.3d 974, 990 (9th Cir. 2020). That is precisely
what Ellis alleges: He was “directly and economically hurt
by” SRP’s exclusionary pricing scheme, which is aimed at
suppressing competition by discouraging customers from
installing solar-energy systems. Glen Holly, 352 F.3d at 376.
22 ELLIS V. SALT RIVER PROJECT
Ellis’s injury was caused by a scheme “inten[ded] to harm
competition by increasing prices,” and his injury “flows
from that which makes [the conduct] unlawful.” American
Ad Mgmt., 190 F.3d at 1056.
The Supreme Court’s decision in Blue Shield of Virginia
v. McCready, 457 U.S. 465 (1982), is instructive. That case
involved a challenge to “a group health plan’s practice of
refusing to reimburse subscribers for psychotherapy
performed by psychologists, while providing reimbursement
for comparable treatment by psychiatrists,” in order to
“restrain competition in the psychotherapy market.” Id.
at 467. The plaintiff, McCready, “did not yield” to that
“coercive pressure” and paid out-of-pocket for treatment
from a psychologist. Id. at 483. Much like SRP, Blue Shield
argued that McCready could not establish antitrust injury
because her injury was not a direct consequence of “the
competitive advantage” that Blue Shield bestowed on
psychiatrists, and she did not “claim that her psychologists’
bills [were] higher than they would have been had the
conspiracy not existed.” Id. at 481. The Supreme Court
rejected that argument because McCready’s injury was
“inextricably intertwined with the injury the conspirators
sought to inflict on psychologists and the psychotherapy
market.” Id. at 484. The Court therefore held that the injury
“‘flows from that which makes defendants’ acts unlawful’
within the meaning of Brunswick.” Id.So too here. The increased prices that SRP imposed on
solar customers are “inextricably intertwined with”—indeed
they are the means of—SRP’s allegedly unlawful scheme to
reduce solar-energy competition. McCready, 457 U.S.
at 484. SRP cannot escape liability by portraying Ellis’s
injury as mere collateral damage of its exclusionary conduct.
Ellis alleges “a purposefully anticompetitive scheme” and
ELLIS V. SALT RIVER PROJECT 23
“seeks to recover as damages the sums lost to [him] as the
consequence of [SRP’s] attempt to pursue that scheme.” Id.
at 483 (emphasis omitted). He adequately alleges antitrust
injury.
B
SRP asserts several common-law and statutory defenses.
We begin with the filed-rate doctrine, which “is a judicially
created rule that prohibits individuals from asserting civil
antitrust challenges to an entity’s agency-approved rates.”
Wortman v. All Nippon Airways, 854 F.3d 606, 610 (9th Cir.
2017). The filed-rate doctrine can bar federal antitrust claims
based on rates approved by state agencies. Knevelbaard
Dairies v. Kraft Foods, Inc., 232 F.3d 979, 992 (9th Cir.
2000); see also Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17,
20 (2d Cir. 1994) (“[C]ourts have uniformly held . . . that the
rationales underlying the filed rate doctrine apply equally
strongly to regulation by state agencies.”).
The problem for SRP, however, is that it does not file its
rates with anyone other than itself. SRP’s board of directors
sets rates unilaterally; unlike other Arizona utilities, SRP is
not regulated by the Arizona Corporation Commission.
While it is true that “[w]e have previously applied the filed
rate doctrine to circumstances in which the relevant rates
were not literally filed,” we have nevertheless required that
some agency—not merely the entity charging the rates—
“engage[] in sufficient regulation through other means to
satisfy the purposes of the doctrine.” Wortman, 854 F.3d
at 614. But no agency regulates SRP.
SRP focuses on the fact that its unilateral ratemaking
authority, granted to it by the State, allows it to set rates that
are “just and reasonable,” Ariz. Rev. Stat. Ann. § 30-
805(A)(1); see id. §§ 48-2334, 30-802. In this respect, SRP
24 ELLIS V. SALT RIVER PROJECT
argues, its authority is comparable to that of the Federal
Energy Regulatory Commission, which has authority to
ensure that rates for the sale of electricity and natural gas
within its jurisdiction are just and reasonable. See 15 U.S.C.
§ 717c (natural gas); 16 U.S.C. § 824d (electricity). Rates
approved by the Commission are subject to the filed-rate
doctrine. See Entergy La., Inc. v. Louisiana Pub. Serv.
Comm’n, 539 U.S. 39, 47 (2003); Arkansas La. Gas Co. v.
Hall, 453 U.S. 571, 577 (1981). But SRP’s analogy is flawed
because FERC regulates the rates charged by market
participants, while SRP is a market participant itself, and as
we have explained, no agency regulator is tasked with
ensuring that SRP follows Arizona’s statutory directive.
The filed-rate doctrine presumes at least some degree of
independent oversight: It applies only so long as an agency
“continues to engage in regulatory activity and has not
effectively abdicated its rate-making authority.” E. & J.
Gallo Winery v. EnCana Corp., 503 F.3d 1027, 1040 (9th
Cir. 2007) (internal quotation marks omitted). For example,
although the doctrine applies to FERC-authorized market-
based rates—which are not literally “filed” with FERC—
that is because FERC grants market-based-rate authorization
only after reviewing the market and determining it to be
competitive, and FERC retains authority to exercise
“ongoing oversight of the market.” Id. at 1042.
We have never extended the filed-rate doctrine to
unilateral, unsupervised rate-setting by a market participant.
In that context, there is no reason to presume that “rates are
just and reasonable as a matter of law” and should be
immune from collateral challenge. E. & J. Gallo Winery,
503 F.3d at 1040. We decline to extend the doctrine here.
ELLIS V. SALT RIVER PROJECT 25
C
We also reject SRP’s claim that it is entitled to state-
action immunity. The doctrine of state-action immunity
recognizes that “‘nothing in the language of the Sherman Act
or in its history’ suggested that Congress intended to restrict
the sovereign capacity of the States to regulate their
economies,” so “the Act should not be read to bar States
from imposing market restraints ‘as an act of government.’”
FTC v. Phoebe Putney Health Sys., Inc., 568 U.S. 216, 224
(2013) (quoting Parker v. Brown, 317 U.S. 341, 350, 352
(1943)). The doctrine is “disfavored,” however, and applies
“only when it is clear that the challenged anticompetitive
conduct is undertaken pursuant to a regulatory scheme that
‘is the State’s own.’” Id. at 225 (first quoting FTC v. Ticor
Title Ins. Co., 504 U.S. 621, 636 (1992); and then quoting id.
at 635). Where, as here, the “allegedly anticompetitive
conduct [is] undertaken by a substate governmental entity,”
then immunity applies only if the challenged conduct is
“undertaken pursuant to a ‘clearly articulated and
affirmatively expressed’ state policy to displace
competition.” Id. at 225–26 (quoting Community Commc’ns
Co. v. Boulder, 455 U.S. 40, 52 (1982)). “[T]he ultimate
requirement [is] that the State must have affirmatively
contemplated the displacement of competition such that the
challenged anticompetitive effects can be attributed to the
‘state itself.’” Id. at 229 (quoting Parker, 317 U.S. at 352);
accord Chamber of Com. of the U.S. v. City of Seattle,
890 F.3d 769, 781 (9th Cir. 2018).
State-action immunity is inapplicable here because the
State of Arizona has not articulated a “policy to displace
competition.” Phoebe Putney, 568 U.S. at 226. To the
contrary, the district court correctly observed that Arizona’s
“statutes signal a shift by [the] legislature to promote
26 ELLIS V. SALT RIVER PROJECT
competition in the retail electricity market,” not to curtail it.
For example, Arizona has declared “that the most effective
manner of establishing just and reasonable rates for
electricity is to permit electric generation service prices to be
established in a competitive market.” Ariz. Rev. Stat. Ann.
§ 40-202(D). The State requires public power entities to
“open their entire service territories to competition to
electricity suppliers certificated by the [Arizona Corporation
Commission],” id. § 30-803(A), and prohibits them from
charging their competitors discriminatory rates to use their
facilities, id. § 30-805(E). It requires public power entities to
“adopt a code of conduct to prevent anticompetitive
activities,” id. § 30-803(F), and to establish “terms and
conditions for competition in the retail sale of electric
generation service,” id. § 30-802(B)(1)(a). It prohibits
public power entities from calculating rates so as to offset
“[a]ny reduction in electricity purchases . . . resulting from
self-generation.” Id. § 30-805(D). And it subjects providers
of “competitive electric generation service” to its antitrust
laws. Id. § 30-813. As SRP concedes, this statutory
framework expresses a general policy favoring competition.
Nevertheless, SRP claims that the displacement of
competition is a natural consequence of its authority to set
“just and reasonable” rates. But “state-law authority to act is
insufficient to establish state-action immunity; the substate
governmental entity must also show that it has been
delegated authority to act or regulate anticompetitively.”
Phoebe Putney, 568 U.S. at 228, 234. SRP responds that
rate-setting is “inherently anticompetitive.” Arizona
specified just the opposite, however, when it declared “that
the most effective manner of establishing just and reasonable
rates for electricity” is not for SRP to set them
anticompetitively but instead for them “to be established in
a competitive market.” Ariz. Rev. Stat. Ann. § 40-202(D).
ELLIS V. SALT RIVER PROJECT 27
SRP further argues that despite section 30-803(A)’s call
for public power entities to “open their entire service
territories to competition,” the Arizona Corporation
Commission has yet to certify any competitors, suggesting
that Arizona left it to the regulator’s discretion whether to
allow competition and the regulator simply decided not to do
so. Cf. California CNG, Inc. v. Southern Cal. Gas Co.,
96 F.3d 1193, 1197, 1200 (9th Cir. 1996). But Arizona did
not leave it to the Commission to determine “the need for
th[e] market to develop into a competitive one.” Id. at 1197.
It provided that power entities “shall open their entire
service territories to competition.” Ariz. Rev. Stat. Ann.
§ 30-803(A) (emphasis added). The Commission is merely
tasked with certifying prospective suppliers. Id. Even if
“[t]he sort of competition [Arizona law] envisions has yet to
emerge on the scale the legislature hoped,” Arizona has
clearly “expresse[d] a policy preference for competition in
electricity generation and supply.” Kay Elec. Coop. v. City
of Newkirk, 647 F.3d 1039, 1045 (10th Cir. 2011) (Gorsuch,
J.). That state policy prevents SRP from invoking state-
action immunity.
D
Finally, we consider whether the Local Government
Antitrust Act shields SRP from antitrust damages. The
LGAA precludes the recovery of antitrust damages “from
any local government, or official or employee thereof acting
in an official capacity.” 15 U.S.C. § 35(a). A “local
government” includes “a school district, sanitary district, or
any other special function governmental unit established by
State law in one or more States.” Id. § 34(1)(B) (emphasis
added). SRP was established by Arizona law as an
“agricultural improvement district” and is “a public,
political, taxing subdivision of the state.” Ariz. Rev. Stat.
28 ELLIS V. SALT RIVER PROJECT
Ann. § 48-2302. As such, it is a “special function
governmental unit” that is exempt from antitrust damages.
15 U.S.C. § 34(1)(B).
In resisting this conclusion, Ellis relies exclusively on
the LGAA’s legislative history. First, he notes that electric
utilities are not listed in a committee report among other
“special purpose political subdivisions” including “planning
districts, water districts, sewer districts, irrigation districts,
drainage districts, road districts, and mosquito control
districts.” H.R. Rep. No. 98-965, at 19–20 (1984). But “[i]f
the text is clear, it needs no repetition in the legislative
history,” and therefore “silence in the legislative history . . .
cannot defeat the better reading of the text.” Encino
Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1143 (2018).
In any event, water utilities are referenced in the report, and
SRP provides both water and electric service.
Second, relying on the same report, Ellis contends that
Congress intended to prevent “payment of any antitrust
judgment . . . from the ‘general revenues,’ thus shifting the
burden . . . to the ‘innocent’ taxpayers,” and that no such
concern exists here. H.R. Rep. No. 98-965, at 11. Even if that
was the principal concern motivating the enactment of the
LGAA, the text does not limit the statute’s scope to contexts
in which that concern is present. “[S]tatutory prohibitions
often go beyond the principal evil to cover reasonably
comparable evils, and it is ultimately the provisions of our
laws rather than the principal concerns of our legislators by
which we are governed.” Oncale v. Sundowner Offshore
Servs., Inc., 523 U.S. 75, 79 (1998).
We conclude that the LGAA shields SRP from federal
antitrust damages. Because Ellis also seeks declaratory and
injunctive relief, and the LGAA does not bar those forms of
ELLIS V. SALT RIVER PROJECT 29
relief, we remand to the district court for further
proceedings.
The parties shall bear their own costs on appeal.
AFFIRMED in part, REVERSED in part, and
REMANDED.